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We take a look at an article published on Statistics South Africa (Stats SA) website regarding the mining industry in South Africa in 2018.
We have long been saying that the gold mining industry in South Africa is on its last legs and is dying a slow painful death, Numbers from Stats SA supports this view. |
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Mining production stumbles in 2018
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The Investing in African Mining Indaba, the world’s largest mining conference, ended a week ago in Cape Town. Investment promises made at the conference might have a positive impact on the future of the industry. Stats SA takes a look at how mining fared in 2018. Mining had a lacklustre year. Production fell by 1,6% in 2018 compared with 2017, down from the 3,9% rise in 2017. Gold, copper and iron ore were the biggest drags on activity in 2018, according to Stats SA’s most recent Mining: production and sales release
Gold continued its long-term decline with a 14,5% drop in production in 2018, the biggest annual slump since 2008 when production tumbled by 16,2%. Strike action during the year contributed to the fall in activity in 2018.
Once South Africa’s most beloved precious metal, gold production has steadily declined over the last few decades. In the last 20 years, gold miners have only seen two years of positive annual growth (in 2002 and 2013). South Africa produced 83% less gold in 2018 than it did in 1980. Gold’s fall from grace has seen its labour force whittle away from 339 000 individuals in 1997 to about 166 000 in 20072. The most recent data from the Department of Mineral Resources, for September 2017, pegs the workforce at just over 112 000 individuals
The Investing in African Mining Indaba, the world’s largest mining conference, ended a week ago in Cape Town. Investment promises made at the conference might have a positive impact on the future of the industry. Stats SA takes a look at how mining fared in 2018. Mining had a lacklustre year. Production fell by 1,6% in 2018 compared with 2017, down from the 3,9% rise in 2017. Gold, copper and iron ore were the biggest drags on activity in 2018, according to Stats SA’s most recent Mining: production and sales release
Gold continued its long-term decline with a 14,5% drop in production in 2018, the biggest annual slump since 2008 when production tumbled by 16,2%. Strike action during the year contributed to the fall in activity in 2018.
Once South Africa’s most beloved precious metal, gold production has steadily declined over the last few decades. In the last 20 years, gold miners have only seen two years of positive annual growth (in 2002 and 2013). South Africa produced 83% less gold in 2018 than it did in 1980. Gold’s fall from grace has seen its labour force whittle away from 339 000 individuals in 1997 to about 166 000 in 20072. The most recent data from the Department of Mineral Resources, for September 2017, pegs the workforce at just over 112 000 individuals
More recently, Sibanye-Stillwater announced that it would start the process of restructuring a number of its gold mines, with a potential loss of up to 6 670 jobs. Copper production fell by 28,5% in 2018. This is the biggest annual fall on record since 1981, the year Stats SA started publishing growth figures in the current series. Iron ore was the third largest contributor to mining’s slump in 2018, falling by 2,3%. Diamonds, chromium, manganese, and platinum group metals (PGMs) just managed to keep their heads above water, though. South African diamond production climbed by 7,7% in 2018, the fourth consecutive year of positive growth for the precious stone. In his address at the Investing in African Mining Indaba, President Cyril Ramaphosa reiterated government’s commitment to creating an enabling environment for mining investors. With the renewed vigour and commitment amongst industry players, the country will be keeping a close eye on mining’s performance in 2019.
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With loadshedding becoming part of South African's daily lives again, with ESKOM not being able to provide enough electricity to meet demand, we suspect the miners will be heavily affected by this, as they will have to buy back up generators and pay to run them at costs well above what ESKOM can supply electricity at, just so they can run their operations uninterrupted. This will affect productivity, input costs, employment levels of miners as well as miners profit margins. Not good to have such an extra burden placed on a industry that is already struggling.
Article end
With loadshedding becoming part of South African's daily lives again, with ESKOM not being able to provide enough electricity to meet demand, we suspect the miners will be heavily affected by this, as they will have to buy back up generators and pay to run them at costs well above what ESKOM can supply electricity at, just so they can run their operations uninterrupted. This will affect productivity, input costs, employment levels of miners as well as miners profit margins. Not good to have such an extra burden placed on a industry that is already struggling.